Lexin lobs accusations as receiver seeks company records
A director of embattled natural gas producer Lexin Resources Ltd. accused a court-appointed receiver’s lawyer of making “silly threats” when she warned of using the courts to secure the company’s records.
The latest report prepared by Lexin’s receiver, Grant Thornton, outlines ongoing roadblocks in its attempts to obtain company documents needed to sell Lexin’s assets and pay creditors.
Some records were seized from garbage bags and storage lockers, though Lexin’s lawyers have received the court’s permission to review all of them before handing over documents that are not subject to lawyer-client privilege, according to the Financial Post.
The move has added delays at a time that Lexin is appealing the receivership.
The Alberta Energy Regulator took the unprecedented step in March of forcing Lexin into receivership after losing confidence in the sour gas producer’s ability to safely manage its assets.
The watchdog claims the company owes it more than $1 million in levies and $70 million in security deposits.
The receiver’s law firm, Borden Ladner Gervais, contacted Lexin’s records office in late March seeking additional documents that would aid the receivership, but Lexin director Michael Smith replied he did not have what they were looking for.
Robyn Gurofsky, a partner in the law firm, contacted Lexin lawyers at Groia and Co., writing it’s “imperative” the receiver secures the records. The letters were filed with the receiver’s report.
“We do not intend to respond to Mr. Smith’s email,” Gurofsky wrote. “If we do not get the records requested, we will take steps to put all of this correspondence in front of the court, including Mr. Smith’s email, and obtain the appropriate relief.”
‘SILLY THREATS’
Smith replied more than a week later, in mid-April, writing that Gurofsky appeared to have “looked at yourself and realized communication creates solutions and your prior refusal to communicate with me was just an ordinary emotional outbursts.
“Let’s also put away your threats and remember solutions find results, not silly threats.”
Smith promised to look for “information and facts,” and followed up about a week later with a memo that said his office found boxes that may contain “the items of interest.”
In the receiver’s latest report, filed in court late April, the firm had still not obtained Lexin’s records.
The report cited numerous challenges facing what it called a complex receivership involving an oil and gas company with more than 1,600 sites.
Aside from the struggle to obtain records, the receiver has been unable to speak with Lexin’s executives, a number of whom have left the country. The case is also complicated by a complex network of companies related to Lexin as well as a high volume of litigation facing the company.